Technical Note
This release presents labor force and unemployment data for census
regions and divisions, states, and selected substate areas from the
Local Area Unemployment Statistics (LAUS) program (tables 1 to 4). Also
presented are nonfarm payroll employment estimates by state and major
industry sector from the Current Employment Statistics (CES) program
(tables 5 and 6). The LAUS and CES programs are both federal-state
cooperative endeavors.
Labor force and unemployment--from the LAUS program
Definitions. The labor force and unemployment data are based on the
same concepts and definitions as those used for the official national
estimates obtained from the Current Population Survey (CPS), a sample
survey of households that is conducted for the Bureau of Labor
Statistics (BLS) by the U.S. Census Bureau. The LAUS program measures
employment and unemployment on a place-of-residence basis. The universe
for each is the civilian noninstitutional population 16 years of age and
over. Employed persons are those who did any work at all for pay or
profit in the reference week (the week including the 12th of the month)
or worked 15 hours or more without pay in a family business or farm,
plus those not working who had a job from which they were temporarily
absent, whether or not paid, for such reasons as labor-management
dispute, illness, or vacation. Unemployed persons are those who were
not employed during the reference week (based on the definition above),
had actively looked for a job sometime in the 4-week period ending with
the reference week, and were currently available for work; persons on
layoff expecting recall need not be looking for work to be counted as
unemployed. The labor force is the sum of employed and unemployed
persons. The unemployment rate is the number of unemployed as a percent
of the labor force.
Method of estimation. Estimates for 48 of the 50 states, the
District of Columbia, the Los Angeles-Long Beach-Glendale metropolitan
division, New York City, and the balances of California and New York
State are produced using estimating equations based on regression
techniques. This method, which underwent substantial enhancement at the
beginning of 2005, utilizes data from several sources, including the
CPS, the CES, and state unemployment insurance (UI) programs. Estimates
for the state of California are derived by summing the estimates for the
Los Angeles-Long Beach-Glendale metropolitan division and the balance of
California. Similarly, estimates for New York State are derived by
summing the estimates for New York City and the balance of New York
State. Estimates for all nine census divisions and the five additional
substate areas contained in this release (the Cleveland-Elyria-Mentor
and Detroit-Warren-Livonia metropolitan areas and the Chicago-Joliet-
Naperville, Miami-Miami Beach-Kendall, and Seattle-Bellevue-Everett
metropolitan divisions) and their respective balances of state are based
on a similar regression approach that does not incorporate CES or UI
data. Estimates for census regions are obtained by summing the model-
based estimates for the component divisions and then calculating the
unemployment rate. Each month, census division estimates are
controlled to national totals; state estimates are then controlled to
their respective division totals. Substate and balance-of-state
estimates for the five areas noted above are controlled to their
respective state totals. Estimates for Puerto Rico are derived from a
monthly household survey similar to the CPS. A detailed description of
the estimation procedures is available from BLS upon request.
Annual revisions. Labor force and unemployment data for prior years
reflect adjustments made at the end of each year. The adjusted
estimates reflect updated population data from the U.S. Census Bureau,
any revisions in the other data sources, and model reestimation. In
most years, historical data for the most recent five years (both
seasonally adjusted and not seasonally adjusted) are revised near the
beginning of each calendar year, prior to or coincident with the release
of January estimates.
Seasonal adjustment. The LAUS program introduced smoothed-seasonally-
adjusted (SSA) estimates in January 2010. These are seasonally-adjusted
data that have incorporated a long-run trend smoothing procedure,
resulting in estimates that are less volatile than those previously pro-
duced. The estimates are smoothed using a Henderson Trend Filter (H13).
The H13 uses a filtering procedure, based on moving averages, to remove
the irregular fluctuations from the seasonally-adjusted series, leaving
the trend. The same process is used on both historical and current year
estimates.
Seasonally-adjusted labor force estimates from January 1976 through
December 2009 were replaced with the SSA estimates for all four census
regions, nine census divisions, all States, the District of Columbia,
New York City, the Los Angeles-Long Beach-Glendale metropolitan
division, and the respective balances of New York and California.
Seasonally-adjusted estimates for the Cleveland-Elyria-Mentor and
Detroit-Warren-Livonia metropolitan areas and the Chicago-Joliet-
Naperville, Miami-Miami Beach-Kendall, and Seattle-Bellevue-Everett
metropolitan divisions and the respective balances of Ohio, Michigan,
Illinois, Florida, and Washington were also replaced from January 1983
through December 2009. For more information about the smoothing
technique and the reasons behind the change, see the BLS Web site at
www.bls.gov/lau/lassaqa.htm.
Area definitions. The substate area data published in this release
reflect the standards and definitions established by the U.S. Office of
Management and Budget on December 1, 2009. A detailed list of the
geographic definitions is available on the Internet at
www.bls.gov/lau/lausmsa.htm.
Employment--from the CES program
Definitions. Employment data refer to persons on establishment
payrolls who receive pay for any part of the pay period that includes
the 12th of the month. Persons are counted at their place of work
rather than at their place of residence; those appearing on more than
one payroll are counted on each payroll. Industries are classified on
the basis of their principal activity in accordance with the 2007
version of the North American Industry Classification System.
Method of estimation. The employment data are estimated using a
"link relative" technique in which a ratio (link relative) of current-
month employment to that of the previous month is computed from a sample
of establishments reporting for both months. The estimates of
employment for the current month are obtained by multiplying the
estimates for the previous month by these ratios. Small-domain models
are used as the official estimators for the approximately 39 percent of
CES published series which have insufficient sample for direct sample-
based estimates.
Annual revisions. Employment estimates are adjusted annually to a
complete count of jobs, called benchmarks, derived principally from tax
reports that are submitted by employers who are covered under state
unemployment insurance (UI) laws. The benchmark information is used to
adjust the monthly estimates between the new benchmark and the preceding
one and also to establish the level of employment for the new benchmark
month. Thus, the benchmarking process establishes the level of
employment, and the sample is used to measure the month-to-month changes
in the level for the subsequent months.
Seasonal adjustment. Payroll employment data are seasonally adjusted
at the statewide supersector level. In some states, the seasonally
adjusted payroll employment total is computed by aggregating the
independently adjusted supersector series. In other states, the
seasonally adjusted payroll employment total is independently adjusted.
Revisions of historical data for the most recent 5 years are made once a
year, coincident with annual benchmark adjustments.
Caution on aggregating state data. State estimation procedures are
designed to produce accurate data for each individual state. BLS
independently develops a national employment series; state estimates are
not forced to sum to national totals. Because each state series is
subject to larger sampling and nonsampling errors than the national
series, summing them cumulates individual state level errors and can
cause significant distortions at an aggregate level. Due to these
statistical limitations, BLS does not compile a "sum-of-states"
employment series, and cautions users that such a series is subject to a
relatively large and volatile error structure.
Reliability of the estimates
The estimates presented in this release are based on sample surveys,
administrative data, and modeling and, thus, are subject to sampling and
other types of errors. Sampling error is a measure of sampling
variability--that is, variation that occurs by chance because a sample
rather than the entire population is surveyed. Survey data also are
subject to nonsampling errors, such as those which can be introduced
into the data collection and processing operations. Estimates not
directly derived from sample surveys are subject to additional errors
resulting from the specific estimation processes used. The sums of
individual items may not always equal the totals shown in the same
tables because of rounding. Unemployment rates are computed from
unrounded data and thus may differ slightly from rates computed using
the rounded data displayed in the tables.
Use of error measures. In 2005, the LAUS program introduced several
improvements to its methodology. Among these were the development of
model-based error measures for the monthly estimates and the estimates
of over-the-month changes. The introductory section of this release
preserves the long-time practice of highlighting the direction of the
movements in regional and state unemployment rates and state nonfarm
payroll employment regardless of their statistical significance. The
remainder of the analysis in the release takes statistical significance
into consideration.
Labor force and unemployment estimates. Model-based error measures for
both seasonally adjusted and not seasonally adjusted data and for over-
the-month changes are available online at www.bls.gov/lau/lastderr.htm.
BLS uses a 90-percent confidence level in determining whether changes in
LAUS unemployment rates are statistically significant. The average mag-
nitude of the current year over-the-month change in a state unemployment
rate that is required in order to be statistically significant at the
90-percent confidence level is just over 0.2 percentage point. The aver-
age amount of the current over-the-year change in a state unemployment
rate to be considered statistically significant is between 0.8 and 0.9
percentage point. More details can be found on the Web site. Measures
of nonsampling error are not available, but additional information on
the subject is provided in Employment and Earnings Online at
www.bls.gov/opub/ee/home.htm.
Employment estimates. Measures of sampling error for state CES data
at the total nonfarm and supersector level and for metropolitan area
CES data at the total nonfarm level are available online at
www.bls.gov/sae/790stderr.htm. BLS uses a 90-percent confidence level
in determining whether changes in CES employment levels are statis-
tically significant. Information on recent benchmark revisions for
states is available on the Internet at www.bls.gov/sae/.
Additional information
More complete information on the technical procedures used to develop
these estimates and additional data appear in Employment and Earnings
Online.
Estimates of labor force and unemployment from the LAUS program, as
well as nonfarm employment from the CES program, for over 300 metro-
politan areas and metropolitan New England City and Town Areas (NECTAs)
are available in the news release, Metropolitan Area Employment and
Unemployment. Estimates of labor force, employment, and unemployment
for all states, metropolitan areas, labor market areas, counties,
cities with a population of 25,000 or more, and other areas used in
the administration of various federal economic assistance programs are
available on the Internet at www.bls.gov/lau/. Employment data from
the CES program are available on the Internet at www.bls.gov/sae/.
Information in this release will be made available to sensory
impaired individuals upon request. Voice phone: (202) 691-5200;
Federal Relay Service: (800) 877-8339.